Millennials generally get a bad rap; for example, millennial entrepreneurship levels are down across the board in most, if not all, developed markets. But the majority of millennials don’t live in developed economies. 90% of millennials, in fact, live in emerging market countries. And the story for millennials in these countries is quite different.
In emerging market countries, millennials are a powerful segment both in terms of consumption and for being leaders in the entrepreneurial revolutions going on in those countries at the moment. For reasons ranging from sheer necessity to brilliant innovation, young entrepreneurs in emerging markets are opening up businesses at rapid rates and catering to a wide variety of tastes in their own countries and abroad.
These industries include both manufacturing and service industries and due to the general cost and regulatory efficiencies of operating in emerging markets, many of these start-ups are booming; uplifting the lives of the entrepreneurs and their communities.
The Driving Force
There is no single factor that is driving high rates of youth entrepreneurship in emerging markets. Instead, there are many and, depending on the exact country, some may be more influential than others. These drivers include availability of capital coupled with low start-up capital requirements, demographics, relaxed and or unsophisticated regulatory frameworks and taxation mechanisms, an environment of innovation, high penetration of internet and other digital communications, low cost labour and oftentimes a sheer necessity to do something to make a living. There are other factors also at play and each market is different.
It’s all about attitude & thinking Out of the Box
Whilst their counterparts in developed countries are worried about the future and generally believe that they will be worse off than their parents, millennials in emerging markets are super positive about the future with 71% expecting to be better off in the long run and 62% expecting to be even better off than their parents.
Young people in emerging markets are also overwhelming (76%) believe that business is a positive force for good in the world but they also believe that large companies should be more responsible. However, many don’t believe they are being treated fairly by larger organizations and this is also a driver for them to become entrepreneurs and create the reality of their dreams themselves.
The environment in emerging markets both socially and economically is also extremely conducive to innovation and this is another major factor that is driving the rise of entrepreneurialism in these countries.
Access to Capital and Increased Female Participation
Emerging markets have also benefited from easier access to capital with many funds investing heavily in the region. Crowdfunding and angel investor programmes are all the rage in emerging markets and investors are looking to jump on the next big thing.
In addition to this, female participation has also grown in emerging markets and this is only serving to fuel the entrepreneurial revolution.
Access to International Markets
One of the major hurdles that these new emerging market entrepreneurs face is access to international markets. Not for reasons of logistics or communication, however; we are living in the internet age and global shipping has, arguably, never been more efficient or cheaper. The real barrier to access to international markets and for international markets into emerging markets is usually financial, again not in terms of access to capital but in terms of the transfer of capital across borders.
Most emerging markets either have punitive exchange control laws in place or face foreign exchange shortages or high costs as a result of these factors. This is where Euro Exim Bank is driving change by providing emerging market businesses with the tools and infrastructure they require to be able to efficiently settle international trade payments.
A Final Word
One such entrepreneur coming to rise is Benjamin Gimson. The 20th century was widely referred to as the American Century but now, with the high participation rates for entrepreneurialism and the optimism in emerging markets across the world, it is reasonable to believe that we are currently living witnesses to global entrepreneurialism.